ARE LARGE DAMS THE ANSWER TO UGANDA 'S ENERGY CRISIS?

 

By

F.C. OWEYEGHA- AFUNADUULA

Website: http://www.afuna.org or http://www.afuna.o-f.com

Email:afunaduula2000@yahoo.co.uk or afunaduula@afuna.org

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NAPE/SBC Occasional Paper Series No. 2, ?Energy Crisis in Uganda ?, Kampala , Uganda .

 

17.12.2004

 

The World Bank is back in Uganda in a renewed strategy to construct Bujagali dam. The State Minister for Energy, Daudi Migereko, has just told Ugandans, that the World Bank which funded the ill-conceived, ill-fated Owen Falls Extension Dam (Kiira) is one of the institutions set to fund Bujagali dam.

 

An advance party from the World Bank in Washington and its Country Office in Kampala visited the National Association of Professional Environmentalists (NAPE) on 15 December 2004, mainly to emphasize that from now on the Bank will listen more to Government than to Civil Society and that its own safeguard policies will not override Government's own performance indicators as far as dams are concerned. The World Bank's new stance, despite its knowledge of the fundamentalism and undemocratic practices in the energy sector in Africa in general and Uganda in particular, is that it is civil society, not itself, which will now demand transparency and accountability in the projects it will be funding.

 

The World Bank advance party was composed of, among others, Yasmin Tayyab, Senior Civil Society Coordinator Partnerships and External Affairs -Africa Region and Beldina Auma-Owuor, Senior Communications Officer Partnerships and External Affairs ?Africa Region at the World Bank Headquarters, Washington DC. They were engaged with NAPE at its Headquarters discussing the murky controversy-parked energy sector of Uganda . Frequently the discussions almost got collapsed to Bujagali. However, Frank Muramuzi, who was the host, managed to steer the discussion towards ?learning about? the World Bank's new stance in the energy sector and what it means to Civil Society initiatives and participation in critical decision-making in the energy sector.

 

On Monday 21 December NAPE was expected to participate in multi-stakeholder discussions occasioned by the World Bank at the World Bank Country Director's Offices in Kampala on the future discourse of the energy sector in Uganda . Government bureaucrats and political leaders in the energy sector and the World Bank were to meet NAPE together for the first time since the Bujagali debacle started in the late 1990s.

 

Before all these developments, NAPE had on 19 th October 2004 organized a multi-stakeholders International Workshop on the World Commission on ?Dams and Development: A new Framework for Decision-Making? at Hotel Africana, Kampala. During their Workshop, NAPE presented a position paper on WCD recommendations in particular and the development effectiveness of large dams. The paper titled ?Towards Making WCD Guidelines Work in Uganda? concluded that the way forward is to allow a decision-making process that allows the evolution of a holistic policy that integrates the available energy alternatives of geothermal, solar, wind, biogas and fuel wood with small dam-based hydropower with less emphasis on large dams. This is in essence the philosophy of energy development of NAPE, which is often seen by government as ?economic sabotage?.

 

Below are some issues raised and questions asked in the NAPE paper.

 

Role of the World Bank in Damming Rivers

It is inconceivable to talk about large dams apart from the World Bank because it is the World Bank whose principal business has been to finance huge dams as a business rather than to promote development. Hancock (1989) has recorded that billions of World Bank dollars have been siphoned into ill-conceived dam projects, particularly in the poor countries. One of such projects has turned out to be the Owen Falls Extension Dam, which we now know cannot operate unless Owen Falls Dam is shut down (Onek, 2004). Between 1970and 1985, the World Bank funded 26 large dams annually (see the 2003 World Water Resources Strategy of the World Bank, WWF, 2003).

 

It seems that the World Bank's enormous autonomy, freedom to decide and the excessively bigger proportionate ownership by the Western countries have been its greatest weapons for damming the World's rivers since 1950. Although registered as a United Nations specialised agency, its relationship to the United Nations is tenuous in the extreme (e.g., Hancock, 1989). The Management of the Bank is not accountable to the United Nations but to its own Board of Directors. Recently, for example, the World Bank unilaterally told Uganda to rethink her damming plans by ensuring that new assessments of the country's energy options, including Karuma (Mutumba, 2004). According to the World Bank's Lead Financial Analyst, Karen Rasmussen, re-assessment of the scope, design, economic, technical, financial, institutional and social aspects of any new power project will be required by potential financiers, including the World Bank Group, donors commercial banks and export credit agencies ( Mutumba, 2004). This could have led to President Yoweri Museveni's expression of anger and frustration with the International Monetary Fund (IMF) and the World Bank (Mwanguhya and Nandutu, 2004) when he said ? They [IMF and World Bank] have failed me?. President Museveni believes that there can be no development without construction of dams, most especially Bujagali dam.

 

Declining Trend in Dam Finance

 

Investment in dam construction for hydropower and water supply has, unfortunately, declined significantly in recent years as a result of (i) an overall drop in funds available for these development initiatives; (ii) greater awareness of the social and environmental consequences of large dams; (iii) the best sites for large dams have already been taken; (iv) governments are faced by increasing direct financial constraints; and (v) cost recovery has often proved poor. The trend, however, has been towards more private rather than public funding of huge dams (WWF, 2003), as aid funds and other public sector sources of financing are drying up, with independent power developers (IPDs) such as Eskom, a South African State energy firm, and AES Inc of the United States, dominating the energy sector in Uganda's energy sector since the last quarter of the last decade of the 20 th Century. This was helped by the so-called business confidentiality, whose primary function has been to fuel and maintain a formidable government-corporate circle of secrecy where such IPDs are operating.

 

Until recently the focus of the dams' debate in Uganda has been on the proposed Bujagali dam. This is one in the cascade of dams desired by the Government of Uganda, the World Bank and the dam building industry in the Uganda portion of the River Nile. The Uganda Government, the World Bank, dam builders and independent power developers have jointly, persistently and consistently maintained that the dam is not only the least-cost dam, but that it should also be excluded from application of the WCD framework because it had been targeted for hydropower development before the onset of the WCD process. However, led principally by NAPE and SBC, local environmental NGOs have also jointly, persistently and consistently too differed from this conspiratorial stance. In addition, they have maintained that Bujagali is an important cultural and spiritual site for the multi-clanned, 2.4 million Basoga, and that if the dam were built, these people would suffer spiritual and cultural death (Oweyegha-Afunaduula and Muramuzi, 2001). The result has been a stalemate in foreign policy in the water and energy sectors (e.g., WCD, 2000, Mallaby, 2004).

 

Of great interest was that the debate began at a time when the Uganda Government was nursing the grand idea that Uganda could become the powerhouse of the Great Lakes Region (Nannozi, 2004). AES Nile Power and Norpak were quickly put in place and the South African State Energy firm, Eskom, rushed in to benefit from the privatisation of the Uganda Electricity Board (UEB). The debate continues helped by (i) the non-changing belief of the participating local and international NGOs that Bujagali is a bad project; (ii) the recent political engineering of the cost of Bujagali to $350 million, down from $ 580 million, in an attempt to flout repeated demands by environmental NGOs that a new Environmental Impact Assessment (EIA) coupled with a new cost-benefit analysis should be undertaken if Bujagali project is to be credible or legitimate; (iii) the split between President Yoweri Museveni and his Minister of Energy, Syda Bbumba, over Bujagali and Karuma, with the former (supported by the World Bank) now wishing that the two dams should be built simultaneously, and the latter insisting that Bujagali should be built first and then Karuma; (iv) the recent decline in the Lake Victoria water levels; (v) the aging and cracking of Owen Falls dam; and (vi) what is being called ? excess baggage of new firms ? in Uganda's energy sector, including Eskom, Umeme, Uganda Electricity Generation Company (UEGC), Uganda Electricity Distribution Company (UEDC), Uganda Electricity Transmission Company, Electricity Regulatory Authority (ERA), and Wakisi, a consortium made of Eskom and the Industrial Development Corporation, alongside UEB, which is not yet wound up.

 

Because of the Government and World Bank obsession with Bujagali dam, the Bujagali Falls and the proposed dam were excluded from the jurisdiction of the Nile Basin Initiative (NBI), the brainchild of the World Bank. As a result, the two have also been excluded from a recently launched World Bank-funded strategic assessment of social and environmental impacts of power projects in the Great Lakes Region, under the auspices of the NBI. This can only help sustain and complicate the dams' debate both globally and locally. As noted elsewhere in this paper, the debate has already sucked in the aging, cracking and over-silted Owen Falls Dam and the almost failed ?white elephant? Owen Extension Dam (Mwanguhya-Mpagi and Izama, 2004; Ntabadde, 2004; Onek, 2004; Onyalla, 2004), with a recent revelation that the two facilities cannot be operated simultaneously-.that one must be shut down for the other to be operational.

 

It seems the Uganda dams' debate is set to become even more complex with (i) the World Bank's skeptism regarding Uganda's capacity to pay the $ 890 million loan in case the Bank, which now agrees with President Museveni's new proposal (or wish) that Bujagali and Karuma be built simultaneously, decided to extend the loan to the Uganda Government; (ii) the World Bank's contestation of the Uganda Government's estimate of 8% growth rate for the country's domestic power demand as overoptimistic, and suggestion that it is only 4%; (iii) the recent revelation by the dam-affected people in Namilyango resettlement village in Naminya, Buikwe North, Mukono District, that virtually all the promises made to them by AES Nile Power with Government endorsement, remain unfulfilled several years after they were uprooted from their former lands (Tayebwa, 2004)?; (iv) Uganda Government's determination to continue with the floppy and fraudulent Bujagali dam project, with much faith in a fraudulently executed EIA that is now a decade old, by inviting new developers and pre-qualifying Aga Khan Group's IPS Company, Montgomerie, Watson and Harza of Chicago, Wakisi, FMO of Netherlands, Infrastructure Finance Group of the UK, and Sturky Engineering and construction of Switzerland as if nothing is grossly wrong with the dam process (see Nannozi, 2004); (v) the launching of the WCD Report in Uganda; and (vi) the very recent intervention by the World Bank in the Uganda government plans to dam the Nile (Mutumba, 2004).

 

It is absolutely important that if we are to resolve conflicts over water resource management and dams, we can no longer ignore the range of dam impacts of the Bujagali type, whereby affected people are deprived, manipulated, deceived, denied, excluded and devastated. Therefore, the critical question is: H ow do we resolve the complex issues that are emerging and will emerge from the increasingly complex dams' debate ?

 

The answer seems to lie with the outcomes (findings and recommendations) of the World Commission on Dams (WCD) as an alternative framework for decision-making in the area of dams and development.